The new regime for dormant companies in Italy

Fulvia Astolfi is head of Lovells’ International Tax Practice based in the Rome office.

Under the dormant companies’ anti-avoidance regime, where an Italian company (whether a stock company or a partnership) or an Italian branch of a non-resident entity achieves an amount of revenues lower than a specified level, it is presumed to have a minimum taxable income. This regime has been altered with effect for 2006 by a law decree n223/2006 (the ‘law decree’), converted by a law n248 dated 4 August 2006 and published in the Official Gazette n168 on 11 August 2006, as well as the law n296 dated 27 December 2006 (the ‘finance law’). Fulvia Astolfi examines the changes to the regime and the impact on private equity structures.